Search Frictions, Credit Constraints andFirm Financed General Training
AbstractThis paper shows that in a search model where future employers of trained workers donot benefit from the training in other firms, investment into general training will only be below the competitive level if workers are credit constrained. If workers are credit constrained, then the training firm cannot recover the cost of training since trained workers will search for a better paid job. This does, however, not imply that trainees will benefit from training. Only if the trainee wage is bounded by the workers' credit constraints do trainees gain from training.
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Bibliographic InfoPaper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Paper No. 6.
Date of creation: 2005
Date of revision:
General training; credit constraints; search frictions; matching.;
Find related papers by JEL classification:
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
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